Jersey Sponsorships Likely Coming To U.S. Sports

Labor strife, shaky balance sheets, a lack of available capital, increased scrutiny of Wall Street firms, and a host of other financial storms will persuade owners of U.S. sports teams to develop the game day jersey sponsorship market sooner rather than later. When that market opens, decision-makers on both sides of a sponsorship deal may look to a recent study conducted by Horizon Media that indicates corporate sponsorships on game day jerseys worn by professional sports teams in the United States could generate upwards of $370 million per year. Even in the best of times, the idea that anything in the neighborhood of this number could be achieved would be enough to get at least a few marketing, branding, and sales departments into meetings come Monday morning. Yet whether the findings of this study serve as a baseline, there is in any case a high probability that we already know what the market will look like and how it will behave.

The concept of game day jersey sponsorship is not new to the business of U.S. professional sports leagues. Major League Soccer clubs and corporate partners—Volkswagen, Best Buy, Alaskan Airways— have struck jersey sponsorships deals in the recent past and several teams across the major sports leagues already have sponsorship deals for their practice uniforms. It also hasn’t gone without notice that jersey sponsorships are standard fare for revenue generation among clubs and teams in sports leagues of all types and sizes outside of the U.S. Still, obtaining a valid and reliable metric for many forms of sponsorship has to-date been a rather elusive effort. It is therefore of some benefit to turn to the Horizon Media study, if at least because it might well reveal the landscape of today and the jersey sponsorship market of tomorrow.

The study evaluated each of the top 20 teams in the National Football League, Major League Baseball, the National Basketball Association, and the National Hockey League based on media market size. According to the study, which looked at factors such as logo size, cost of a 30-second commercial, frequency of brand viewed per game, and length of time a brand is visible, it is estimated that the Dallas Cowboys, New England Patriots, and New York Giants could each command $14,011,721 per year in jersey sponsorship. This amount sets them atop the NFL and overall lists. But now consider that this together represents just short of 9 percent of the overall projected amount for all sports. Should there be a lockout, even if everything else is somehow held constant, by how much and in which direction is the number likely to change?

Image by Brian J. McDermott via Flickr

Another thing to consider is that while MLB’s New York Yankees and Boston Red Sox could bring in $13,803,011 and $11,522,219, respectively, there is a significant drop-off to the third-place New York Mets at $8,954,315. These estimates were produced prior to recent news about the Mets ownership situation. But they anyway show a clear disparity that further defines the “haves vs. the have nots” between MLB clubs teams.

More striking, however, is the disparity between leagues. Given the numbers noted above, what is to be made of the finding that in the NBA the Los Angeles Lakers reign with $4,059,744, while the next two positions are held by the New York Knicks at $2,775,182 and Boston Celtics at $2,718,950? Further, what about the estimate that the Chicago Blackhawks, at $1,372,007, are followed by the New York Rangers at $708,267 and Pittsburgh Penguins at $676,938?

One silver lining is that the study purposely did not include the value of in-stadium impressions, ancillary exposure across media, or merchandising, any of which are said to raise the estimated values. But beyond these and any other estimates, it will prove difficult for owners and sponsors to keep from becoming speculators as the jersey sponsorship market beckons—not unlike what was experienced during the decade-long stadium naming rights boom that began in the mid-1990s. As with stadium naming rights, no doubt that many millions of dollars will change hands and a handful of deals will turn out winners on both sides, if mostly owing to serendipity. And here too there is likely to be the absence of an accurate yardstick to determine return on investment, which is due to priority for “doing deals” over creating customers. To wit, look not much further than the amount of attention that is lavished on the number of “impressions” or “detections” without anything about how many people made a purchase of the product or service.

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Thank you, Mike. Your latest writing, on the NFL owners’ labor filing, almost says it all. The ruling in the American Eagle case was more of a deciding factor in things than most people realize; too few generally paid attention because there was so much legalese in the reports about it. There is no question that the ruling is already affecting everything from potential jersey sponsorships to the labor negotiations.

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